Aaron,
I have now taken out the admin side of this script as there is no need for it in my honest opinion and I can see it will cause a world of trouble (starting with that damn missing semi-colon

). The problem is the osC split admin/store way of doing things which I think everyone agrees is a complete nuisance and is to change in ms3.
The way I detect whether the script is running in admin and then alter the path was a hack and I never liked it. The other solution would be to go messing with configuration files and such, but I don't see the point.
For your version:
1. Restore admin/includes/html_output.php to original.
2. In catalog/includes/html_output.php
Change:
// If running in Admin adjust the pathname
if (strtolower(getcwd())."/" != strtolower(DIR_FS_CATALOG)) {
$image_size = @getimagesize("../..".$src);
$src=str_replace(DIR_WS_CATALOG_IMAGES,DIR_WS_IMAGES,$src);
}
else {
$image_size = @getimagesize($src);
}
To:
$image_size = @getimagesize($src);
This should make everything work with the images required set false.
Let me know how you get on.